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Swing trading

From Traderpedia

Definition:A style in which the trader takes on positions which are generally expected to be held from one to three days.

The aim of the swing trader is to profit from the secondary movements in a stock price.

While the buy and hold investor may sit through an uptrend not doing anything with the stock, the swing trader will be attempting to be long on upward swings and short on downward swings, although some methods only advise trading with the trend.

The idea behind this method is to increase the profit available from a move, and to reduce the risk of holding onto a losing position for a long period of time. The compromise is the extra work and the extra trading costs involved.